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Where Taxpayers and Advisers Meet

15% discount when buying share of property

Bill31
Posts:44
Joined:Sun Jan 19, 2020 12:32 am
15% discount when buying share of property

Postby Bill31 » Thu Apr 22, 2021 5:20 pm

If brother and sister own PPR property together, and one wants to buy the others share out, does the 15% discount apply to the share, or is the discount only available for iHT purposes, when someone has passed away?

Eg value of house 800k. Half share is 400k. If allowed to apply 15% discount on the selling of share to sister that is £340k. I'm just not sure if I should apply the discount or not, if i don't I could be making a PET on the excess figure of sale to her.

maths
Posts:8285
Joined:Wed Aug 06, 2008 3:25 pm

Re: 15% discount when buying share of property

Postby maths » Thu Apr 22, 2021 8:54 pm

For CGT you/sister are "connected persons" which means that market values apply; no discount.

Bill31
Posts:44
Joined:Sun Jan 19, 2020 12:32 am

Re: 15% discount when buying share of property

Postby Bill31 » Thu Apr 22, 2021 9:04 pm

For CGT you/sister are "connected persons" which means that market values apply; no discount.
Will there be cgt as its our main residence? we own no other properties.
So as we are connected no discount. I take it that discount is only applicable on death as per the via guidance here:
https://www.gov.uk/guidance/inheritance-tax-manual/section-18-undivided-shares

I refer to section 18.4

maths
Posts:8285
Joined:Wed Aug 06, 2008 3:25 pm

Re: 15% discount when buying share of property

Postby maths » Thu Apr 22, 2021 11:56 pm

No CGT if main residence of person selling/gifting.

The typical 15% discount is for IHT purposes (lifetime gifts and on death).

Bill31
Posts:44
Joined:Sun Jan 19, 2020 12:32 am

Re: 15% discount when buying share of property

Postby Bill31 » Wed Jul 21, 2021 9:31 am

Ohhh I thought the 15% discount applied if your in co ownership at any point in time before or after death. So discount only applies after death and not before?

Bill31
Posts:44
Joined:Sun Jan 19, 2020 12:32 am

Re: 15% discount when buying share of property

Postby Bill31 » Wed Jul 21, 2021 9:33 am

Ohhh I thought the 15% discount applied if your in co ownership at any point in time before or after death. So discount only applies after death and not before?
Also we both live in the property at present so it's true co ownership


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